HOUSTON — Sunnova Energy International Inc. (NYSE: NOVA), one of the largest residential solar-panel installers in the United States, is preparing to file for bankruptcy within weeks, according to people familiar with the matter. The move comes after the company missed an interest payment on its bonds and entered a 30-day grace period on April 1, signaling deepening financial distress amid mounting industry headwinds.
Founded in 2012 and headquartered in Houston, Sunnova had positioned itself as a key player in the home solar and battery market, offering homeowners long-term leases and financing for rooftop solar systems. However, rising interest rates, falling solar installation demand, and persistent cash burn have pushed the publicly traded company to the brink of insolvency.
Sunnova failed to make a scheduled interest payment on roughly $400 million in unsecured bonds, triggering a 30-day grace period that expires at the end of this week. The company has reportedly been in active discussions with financial and legal advisers to prepare a Chapter 11 filing that could come as early as mid-May if it is unable to restructure its obligations out of court.
The bonds in question, issued in 2021 when capital was cheap and investor appetite for clean energy high, now trade at steep discounts, reflecting expectations of default. As of Monday, Sunnova’s 2026 notes were trading at less than 30 cents on the dollar, according to FINRA data.
The company declined to comment on its restructuring plans, but a spokesperson said it remains “committed to exploring all strategic options to continue serving our customers and partners during this challenging period.”
Sunnova’s troubles reflect a broader slowdown in the residential solar market, once one of the hottest corners of the renewable energy boom. Analysts say the industry’s business model, which depends heavily on long-term financing, has come under pressure as borrowing costs have risen and state-level incentives have diminished.
In California — the largest U.S. solar market — recent policy changes slashed compensation for homeowners who feed excess power back into the grid, drastically reducing the financial appeal of new installations. Sunnova, which expanded rapidly in California and other sunbelt states, saw sales volumes stall in 2024 and early 2025.
According to its most recent financials, Sunnova ended Q4 2024 with more than $3.1 billion in long-term debt and just $180 million in unrestricted cash. Its net loss for the full year ballooned to $765 million, up from $453 million in 2023, despite modest revenue growth.
Shares of Sunnova have plummeted more than 90% over the past 12 months, wiping out billions in market capitalization. The company went public in 2019 at $12 per share and traded as high as $58 during the clean energy stock frenzy of 2021. As of market close Monday, NOVA shares traded below $1.10, putting the company at risk of delisting from the New York Stock Exchange.
Critics say Sunnova overextended itself during the boom years, relying on aggressive customer acquisition and low-cost debt to fuel growth, while failing to build sustainable profitability.
“Sunnova is a classic case of a capital-intensive company caught off guard by a tighter interest rate environment,” said Ben Kallo, senior analyst at Baird. “They had a great pitch — solar for everyone, financed for 25 years — but the math stopped working when rates jumped and investor appetite for riskier credits dried up.”
Possible Outcomes: Sale or Restructuring?
Sources familiar with the matter say Sunnova has hired restructuring advisers at Kirkland & Ellis and investment bankers at Lazard to explore options. While a Chapter 11 filing remains likely, the company may also pursue an out-of-court debt exchange or sale of its customer portfolio to a stronger rival.
Potential acquirers could include Sunnova’s larger peers such as Sunrun (NASDAQ: RUN) or Tesla Energy, although industry consolidation has slowed due to similar headwinds across the sector. Analysts also note that many of Sunnova’s solar leases and power purchase agreements may be difficult to unwind or transfer, further complicating any sale.
For the 400,000+ homeowners who lease their systems from Sunnova, the company has stated that operations will continue as normal — at least for now. Customer agreements are typically long-term contracts that remain in effect even if the company restructures.
However, consumer advocates warn that a bankruptcy could lead to degraded service, longer wait times for repairs, and challenges in transferring leases during home sales.
The potential bankruptcy also comes as the Federal Energy Regulatory Commission (FERC) and state utility commissions have begun scrutinizing how rooftop solar companies disclose financing terms and manage customer obligations — a regulatory focus that may intensify in the wake of Sunnova’s collapse.
Sunnova’s anticipated bankruptcy would be one of the largest in the clean energy space since SunEdison’s 2016 collapse, which sent shockwaves through the renewable sector. While the broader solar industry remains bullish on long-term growth driven by federal tax credits and decarbonization goals, investors are growing wary of companies that prioritize rapid expansion over sustainable cash flow.
“This is a reset moment for residential solar,” said Lisa MacGregor, energy markets analyst at Wood Mackenzie. “Sunnova’s downfall won’t be the end of the sector — but it will likely change how capital flows into it moving forward.”
Data Appendix:
- Bond Missed: $400M unsecured note interest payment skipped April 1
- Debt Load: $3.1B (long-term) as of Dec. 31, 2024
- Cash on Hand: $180M (Q4 2024)
- 2024 Net Loss: $765M
- Stock Decline: -91% YoY as of May 2025
- Customer Base: 400,000+ solar service agreements
- Shares Outstanding: ~115M
